Business Strategy for Emerging Markets that Works

The principals of New Markets Advisors have an outstanding track record in emerging markets, including holding executive positions in industries ranging from telecom to banking. Our successes include helping to build Africa's most successful-ever venture capital-backed company, Celtel BV.  From locations in Boston, Johannesburg, and São Paolo, we help clients to win in tough environments.

We know that emerging markets are a graveyard of corporate ambitions. For every powerhouse in developing countries, such as Coca-Cola or GE Healthcare, there are innumerable businesses that struggle to generate demand or beat savvy local competitors. Ford, Vodafone, and many other well-managed companies have largely failed to make money in key emerging markets.

In our view, a big problem is that many firms follow the same strategy in market after market -- target affluent consumers or businesses in Tier 1 cities, and then try to have demand trickle down due to brand prestige and the influence of lead users. Whereas this approach might have once worked in major countries, it is increasingly outdated except for a handful of luxury brands. Local competitors copy winning formulas too quickly, customers insist on offerings that fit their context, and distribution is hard to secure.

Another culprit is having too great a focus on achieving low prices. Price is absolutely a factor in these markets -- at all tiers of customers -- but oftentimes the real emphasis should be on lowering upfront costs, reducing working capital requirements, and creating new business models.

As detailed in the book chapter on this topic in the critically-acclaimed Capturing New Markets (available through completing the form at right), we help clients find success through approaches such as:

  • Creating offerings and business models from a blank slate, working backwards from the jobs customers are trying to get done
  • Targeting middle tiers of household income or business customer revenue
  • Attacking competitors asymmetrically
  • Plotting sales channel strategy, which frequently can make or break businesses in emerging markets
  • Building new financial formulas for creating profit
  • Selecting which countries to target for winning, which to experiment in, and which to postpone
  • Creating leverage among widely varying emerging markets to enhance global capabilities
Our approaches, while rooted in extensive research, are not theoretical. We have fought and won competitive battles in emerging markets, and we know how to drive from high-level strategy to action on the ground.